May 3, 2023
Multiplying your membership may be one of your credit union’s primary objectives for 2023 (and beyond). One thing that may prevent you from drawing in new members is the lack of awareness of a credit union. Traditional misconceptions that credit unions are highly selective or that membership fees are high can stop people from joining a credit union.
Additionally, Gen Zers are simply unaware of what a credit union is and the benefits of banking with one. This market is still relatively untapped for credit unions, with only 26% of 18 -24-year-olds using a credit union. Younger Millennials between the ages of 25-34, are even less likely to use a credit union at an astounding 14%.
While credit unions need to improve their appeal to younger generations, it’s also imperative to educate non-members on the benefits of what a credit union is. If you’re looking for a place to start and need ideas for your content, here are our top eight reasons why anyone (and everyone) should use a credit union:
Even if profit is of the utmost importance, at credit unions, since they are not-for-profit financial institutions, people come first. And people are not looked at as customers; they’re members. And, as members, each individual “owns” a little piece of the credit union, making them a business partner.
Because of this, members receive highly personalized service. Consumer Reports found that 96% of CU members consider themselves “highly satisfied” with their credit union. When banking with a credit union, each individual can rest assured that they’ll get the assistance they need when needed. They won’t have to have endless conversations with an AI bot that cannot answer their questions appropriately.
When in the market for a loan, a credit union may be a top choice because credit unions typically charge lower interest rates on loans, such as mortgage and auto. How can credit unions offer a prime rate? Because their profits go back to their members since members are shareholders. Because of this, credit unions can charge a lower interest rate for a loan.
Again, since credit unions do not need to pay shareholders like a bank, these savings can be passed along to members. Credit unions typically offer higher APYs on CDs and savings accounts. They also have some of the best high-yield savings and checking accounts (with an outstanding APY, low or no monthly maintenance fee, and ideal minimum deposit requirement).
Americans want to keep as much of their money as possible and do not want to pay hefty bank fees. Many FIs charge high fees for checking accounts and other products. Federal credit unions, though, tend to have fewer and lower fees because they are exempt from paying federal taxes. And this tax saving is passed along in the form of these reduced fees.
Another common misconception of credit unions is that they do not offer numerous products like other FIs, but in 2023, that is simply untrue. Credit unions can provide various products, including typical checking and savings accounts, CDs, mortgages, auto, and student loans. CUs can also offer credit card products and money market deposit accounts.
In the post-pandemic era, financial literacy is top of mind for many Americans. According to the FINRA, 61% of adults cannot answer more than three of five questions in their survey on national financial capabilities. Individuals with a low financial understanding are more likely to make poor financial choices that could have a devastating life-long impact. Credit unions recognize this issue and provide their members with resources to navigate these tricky economic times.
Credit unions are more likely to offer webinars or seminars on financial topics, email budgeting tips, and provide members with in-app credit scoring apps and financial calculators. Credit unions also often have an online repository of financial resources, with information on money management, improving credit scores, and choosing the correct interest rate.
Credit unions of 2023 are on par with the digital advancements of big banks and fintechs. This is especially true if they’re seizing web-based cores and mobile apps.
When joining a credit union, members can access various digital banking options. This includes applying for a loan online, accessing their account information directly from their mobile device, and quickly uploading checks to their accounts with remote deposit capture.
Credit unions on a core with an Open API can offer members a plethora of digital functionality. This can include instant credit scoring that pairs the member with a corresponding loan offer and text message notifications when there’s new activity on their account. The options are endless, and credit union technology is aligned with that of well-known banks.
Credit unions are known for being community-centric and committed to serving those underserved by banks. They also focus on supporting diversity and inclusion more than other financial institutions. Credit unions have over ten times more women serving as CEOs than banks.
To further their emphasis on DEI, three times more credit unions (than banks) are considered Minority Depository Institutions (MDIs). The FDIC defines an MDI as “… a federally insured depository institution for which 51 percent or more of the voting stock is owned by minority individuals. Or a majority of the board of directors and the community the institution serves is predominantly minority.”
Commitment to DEI is becoming increasingly important to consumers. Credit unions have continued to increase their efforts in upholding and strengthening DEI efforts.
Besides the advantages above, there are endless reasons for prospects to join a credit union. As a credit union, it is also your responsibility to ensure that potential members know the benefits that await. Whether it’s a general lack of awareness about credit unions or being outspent by banks’ enormous advertising budgets, credit unions like yours must educate consumers on why joining a credit union is the ideal choice.
